On June 1, 2022, Crane Company was started with an initial investment in the company of $21,725 cash. Here are the assets, liabilities, and common stock of the company at June 30, 2022, and the revenues and expenses for the month of June, its first month of operations:

Cash $ 4,960

Notes payable $12,720

Accounts receivable 4,400

Accounts payable 900

Service revenue 7,900

Supplies expense 1,155

Supplies 2,292

Maintenance and repairs expense 690

Advertising expense 400

Utilities expense 210

Equipment 26,300

Salaries and wages expense 1,100

Common stock 21,725

During June, the company issued no additional stock but paid dividends of $1,738.

Prepare an income statement for the month of June.

Prepare a retained earnings statement for the month of June.

Question

Jayson Palmer

Business

27 October, 22:09

On June 1, 2022, Crane Company was started with an initial investment in the company of $21,725 cash. Here are the assets, liabilities, and common stock of the company at June 30, 2022, and the revenues and expenses for the month of June, its first month of operations:

Cash $ 4,960

Notes payable $12,720

Accounts receivable 4,400

Accounts payable 900

Service revenue 7,900

Supplies expense 1,155

Supplies 2,292

Maintenance and repairs expense 690

Advertising expense 400

Utilities expense 210

Equipment 26,300

Salaries and wages expense 1,100

Common stock 21,725

During June, the company issued no additional stock but paid dividends of $1,738.

Prepare an income statement for the month of June.

Prepare a retained earnings statement for the month of June.

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Answers (1)

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Haley Chambers · Answer 1

The preparation is shown below:

Explanation:

The preparation of the month of June income statement for Crane Company is shown below:

Crane company

Income statement

Revenue

Service revenue $7,900

Total revenues $7,900 (A)

Less: Expenses

Supplies expense $1,155

Maintenance and repairs expense $690

Advertising expense $400

Utilities expense $210

Salaries and wages expense $1,100

Total revenues $3,555 (B)

Net income $4,345 (A - B)

And, the preparation of the retained earning statement is presented below

Crane company

Retained Earning statement

For the month of June

Beginning balance of retained earning $0

Add: Net income $4,345

Less: Cash Dividend paid - $1,738

Ending balance of retained earning $2,607